Question 1

When is it not appropriate to use an encumbrance system?

Accepted Answer

A) When there is a significant lag between purchase orders and the receipt of goods 
B) When reporting is done on an expenditure basis 
C) When only a small part of expenditures for goods and services are discretionary 
D) When commitments and expenditures are made on a decentralized basis 
A) When there is a significant lag between purchase orders and the receipt of goods 
B) When reporting is done on an expenditure basis 
C) When only a small part of expenditures for goods and services are discretionary 
D) When commitments and expenditures are made on a decentralized basis

Question 2

A local ice cream shop pledged 10% of its sales on July 1 to the Children's Clubhouse,a not-for-profit organization.How should the Children's Clubhouse treat this pledge?

Accepted Answer

A) Accrue the pledge when it is made 
B) Accrue the pledge only if the amount can be reasonably estimated 
C) Accrue the pledge only if there is reasonable assurance that the ice cream shop will pay 
D) Recognize the pledge when it is collected 
A) Accrue the pledge when it is made 
B) Accrue the pledge only if the amount can be reasonably estimated 
C) Accrue the pledge only if there is reasonable assurance that the ice cream shop will pay 
D) Recognize the pledge when it is collected

Question 3

Which of the following statements about incorporated not-for-profit (NFP)organizations is true?

Accepted Answer

A) Incorporated NFP organizations can only issue preferred shares capital. 
B) Incorporated NFP organizations do not have share capital. 
C) Incorporated NFP organizations can only be government-owned. 
D) NFP organizations cannot be incorporated. 
A) Incorporated NFP organizations can only issue preferred shares capital. 
B) Incorporated NFP organizations do not have share capital. 
C) Incorporated NFP organizations can only be government-owned. 
D) NFP organizations cannot be incorporated.

Question 4

With respect to the endowment fund,which of the following statements is true?

Accepted Answer

A) Endowment contributions are treated the same way under both the deferral method and the restricted fund method. 
B) Endowment contributions are recognized as revenue under the deferral method and as revenue in a restricted fund under the restricted fund method. 
C) Endowment contributions are recognized as a direct increase to net assets under the deferral method and as revenue to the endowment fund under the restricted fund method. 
D) Endowment contributions are recognized as revenue under the deferral method and as a direct increase to net assets under the restricted fund method. 
A) Endowment contributions are treated the same way under both the deferral method and the restricted fund method. 
B) Endowment contributions are recognized as revenue under the deferral method and as revenue in a restricted fund under the restricted fund method. 
C) Endowment contributions are recognized as a direct increase to net assets under the deferral method and as revenue to the endowment fund under the restricted fund method. 
D) Endowment contributions are recognized as revenue under the deferral method and as a direct increase to net assets under the restricted fund method.

Question 5

A university needs to know the cost of delivering each of its programs.Which basis would be the most appropriate for the university to use on its statement of operations?

Accepted Answer

A) Disbursement basis 
B) Expense basis 
C) Expenditure basis 
D) Cash basis 
A) Disbursement basis 
B) Expense basis 
C) Expenditure basis 
D) Cash basis

Question 6

Help Yourself,a not-for-profit organization,has a 5% economic interest in the Furnishing Bank,another not-for-profit organization.The organizations operate independently,have no directors in common,and have no transactions with each other.For financial reporting purposes,how should Help Yourself account for its interest in the Furnishing Bank?

Accepted Answer

A) Consolidation 
B) The equity method 
C) The cost method 
D) Note disclosure only 
A) Consolidation 
B) The equity method 
C) The cost method 
D) Note disclosure only

When is it not appropriate to use an encumbrance system?

A local ice cream shop pledged 10% of its sales on July 1 to the Children's Clubhouse,a not-for-profit organization.How should the Children's Clubhouse treat this pledge?

Which of the following statements about incorporated not-for-profit (NFP)organizations is true?

With respect to the endowment fund,which of the following statements is true?

A university needs to know the cost of delivering each of its programs.Which basis would be the most appropriate for the university to use on its statement of operations?

Setting the Stage

Intercorporate Equity Investments: an Introduction

Business Combinations

Wholly-Owned Subsidiaries: Reporting Subsequent to Acquisition

Consolidation of Non-Wholly Owned Subsidiaries

Subsequent-Year Consolidations: General Approach

Segmented and Interim Reporting

Foreign Currency Transactions and Hedges

Reporting Foreign Operations

Public Sector Financial Reporting

Income Tax Allocation

Income Tax Allocation Subsequent to Acquisition

Good will Impairment Test

Step Purchases

Decreases in Ownership Interest

Preferred and Restricted Shares of Investee Corporation

Intercompany Bond Holdings

Fund Accounting

Filters

Exam 10: Financial Reporting for Not-For-Profit Organizations

When is it not appropriate to use an encumbrance system?

A local ice cream shop pledged 10% of its sales on July 1 to the Children's Clubhouse,a not-for-profit organization.How should the Children's Clubhouse treat this pledge?

Which of the following statements about incorporated not-for-profit (NFP)organizations is true?

With respect to the endowment fund,which of the following statements is true?

A university needs to know the cost of delivering each of its programs.Which basis would be the most appropriate for the university to use on its statement of operations?

Setting the Stage

Intercorporate Equity Investments: an Introduction

Business Combinations

Wholly-Owned Subsidiaries: Reporting Subsequent to Acquisition

Consolidation of Non-Wholly Owned Subsidiaries

Subsequent-Year Consolidations: General Approach

Segmented and Interim Reporting

Foreign Currency Transactions and Hedges

Reporting Foreign Operations

Public Sector Financial Reporting

Income Tax Allocation

Income Tax Allocation Subsequent to Acquisition

Good will Impairment Test

Step Purchases

Decreases in Ownership Interest

Preferred and Restricted Shares of Investee Corporation

Intercompany Bond Holdings

Fund Accounting

Filters